Three recent first-instance decisions of the Brussels court have now confirmed entitlement to the Double Tax treaty between Luxembourg and Belgium to the Luxembourg SICAVs. Therefore, a SICAV should be able entitled to reclaim 15% dividend withholding tax (WHT) rate in Belgium:
Recent development
The Court decision in detail
- October 1, 2025
- April 24, 2026
The French-speaking chamber held that Article 4(1) of the Belgium-Luxembourg Treaty (“DTT”) requires only liability to tax – not effective taxation – and that this tax is not required to be listed in Article 2(3) or (4) of the Treaty.
A Luxembourg SICAV therefore qualifies as a Luxembourg resident through its liability to the taxe d’abonnement (a tax on capital within the meaning of Article 4(1)), to source WHT on Luxembourg-source income, the real estate tax, and, in principle, to corporate income tax (Article 159 LIR) – the statutory exemption of which is partially neutralized under Article 161, second paragraph, LIR insofar as local-source income suffers source withholdings.
The Court further rejected the Belgian authorities’ reliance on a purported 1994/1995 “mutual agreement” excluding SICAVs, finding that the underlying exchange of correspondence does not qualify as a formal mutual agreement under Article 25(3) – the Luxembourg administration having in fact endorsed treaty entitlement of Luxembourg collective investment vehicles.
Following essentially the same reading of Article 4(1) as the October 1, 2025, judgments above, the court confirmed treaty entitlement by Luxembourg SICAVs by reason of its liability to the taxe d’abonnement as well as to source withholdings on Luxembourg-source income and likewise rejected the “mutual agreement” defense. In addition, it also held that there is no legal basis for the extensive list of documents required by the Belgian tax authorities from foreign reclaimants.
KPMG comment
These decisions are welcomed because they strengthen treaty‑based protection for Luxembourg collective investment vehicles seeking WHT reclaims in Belgium and increase legal certainty for Luxembourg SICAVs pursuing refunds.
Although the Belgian tax authorities are currently challenging the application of the treaty to Luxembourg SICAVs, we strongly recommend filing protective WHT reclaims based on the DTT in consideration of the five‑year statute of limitation.
We will continue to monitor the developments in these cases, considering that the Belgium tax authorities can still appeal the decisions.
A team of tax specialists and project managers can assist you with filing these WHT reclaims.
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